By Sabina Mollot
It turns out tenants in Stuyvesant Town/Peter Cooper Village aren’t the only ones attempting to fight MCIs.
At Riverton, an apartment complex in Harlem, the Tenants Association has sued CWCapital, which took over the property after it went into foreclosure, over what tenants claims are inflated major capital improvement (MCI) charges.
The MCIs were for work on roofs and elevators at the property as well as the redesigning of a park when Riverton was owned by Stellar Management. The MCIs vary in cost per apartment, and according to Riverton Tenants Association President Randreta Ward-Evans, it’s mostly seniors who seem to be overpaying.
“I have a senior who’s 97 years old who’s paying $200 more than she should be paying.” she said.
She added that tenants learned from attorneys, during a legal clinic held in March by Assemblyman Keith Wright, that many of them were overpaying.
“We knew we had a problem. We just didn’t know how massive it was,” she said.
In the lawsuit, which aims to collect $10 million for tenants, the Riverton Tenants Association argues that MCIs that have been charged are “inflated, overstated, excessive and fabricated.” It accuses CW of refusing to roll back the rent, despite requests by the RTA and continuing “to collect unlawful rent increases including, but not limited to, increases based upon purported Major Capital Improvements (“MCI”) since in or about 2010 or such other earlier date.”
The suit argues CW isn’t entitled to the MCIs because the company waited too long to collect them. “Pursuant to DHCR policy and precedent the Defendants waived all MCI rent increases if they did not collect same within 120 days of the applicable MCI order or in the next renewal lease after the MCI order. Defendants did neither.”
CWCapital subsidiary CompassRock Senior Vice President David Sorise and Karl Griggs, Riverton’s property manager, are also named in the suit.
While not mentioned in the lawsuit, Ward-Evans said numerous tenants have also complained of paying rent only to have their checks not be deposited. Then, “after three months they get eviction notices.” Though she isn’t sure how many tenants this has happened to, “It’s a huge group. I only know about the people who come to me, but I’m sure there are a lot of people that don’t come to me,” said Ward-Evans.
About 30 percent of the tenants are market rate while the rest are rent stabilized. A stabilized one-bedroom unit will typically rent for $800-$1,000 a month, while the market rate, renovated one-bedrooms are around $1,800. Many of the stabilized renters are seniors, who in some cases were there since Riverton opened as an alternative property to non-white would-be tenants of Stuyvesant Town, which was originally segregated.
Meanwhile, Ward-Evans said tenants at Riverton have enjoyed an “excellent” working relationship with CWCapital for the past four years. Tenant leaders meet with reps for the owner regularly on tenant concerns. “They respond immediately and I really appreciate it,” she added. However, she said tenants felt a lawsuit was the only option to fight the MCIs since an attempt to do so through the Division of Housing and Community Renewal (DHCR), went nowhere.
“I think more tenants will probably take the same route of suing the owner instead of going to the DHCR because it seems that it’s always in the realtor’s favor,” said Ward-Evans. “I think this is going to be the first of many. It doesn’t have to be just Harlem. Going to the DHCR? Done it. Did it. The law has to be dealt with and changed.”
Meanwhile, Wright, who also lives in Riverton, summed up the situation as “a shame, really. “What you have here is yet another chapter in the story of our city’s affordable housing crisis. Honest, hard-working individuals who are robbed of the opportunity to remain in the place they have called home, some such as myself, have been here for decades. These overcharges are egregious and unacceptable but we are committed to seeing this fight through until the end.”
According to a report in the New York Times, Andrew MacArthur, a managing director at CWCapital, seemed surprised by the litigation.
In an official statement to T&V from spokesperson Brian Moriarty, CWCapital indicated the same thing. “We received this lawsuit without prior notice or discussion and are now in the process of trying to understand the specific complaint,” CW said.
“It appears this relates to actions ‘in or about 2010 or such other earlier date’ during which time the property was either owned by a prior owner or managed by a prior management company. Since CWCapital took control of the property we have enjoyed a positive and productive relationship with the TA and have worked hard to re-build the trust between the property owner and our residents that was lost with the previous owners. We have invested heavily in Riverton’s physical condition and have re-vamped maintenance and janitorial procedures to better serve our residents. We will investigate the claims immediately and fully.”
Council Member Dan Garodnick said that he was also looking at the suit to see if there were any parallels between the Riverton and Stuyvesant Town MCIs. The Stuyvesant Town-Peter Cooper Village Tenants Association told T&V earlier this month that it was conferring with counsel over the rejection by the DHCR of arguments made by the TA against two MCIs. One was for roof work, the other for elevators.